What stocks/assets to own if China/US ties continues to worsen?

[sleepydragon]

Questions for folks here?

what if China invades Taiwan ? Or to a less extent, China’s threats to invade Taiwan leads to sanctions or trade wars with US?

in this scenario, how shall one hedge?

long gold?

Hold cash?

long TLT?

long oil companies (OXY?)

long defense companies (which one?)

long tobacco stocks?

long intc? Or ASML?

 

 

[UK]

2 minutes ago, sleepydragon said:

Questions for folks here?

what if China invades Taiwan ? Or to a less extent, China’s threats to invade Taiwan leads to sanctions or trade wars with US?

in this scenario, how shall one hedge?

long gold?

Hold cash?

long TLT?

long oil companies (OXY?)

long defense companies (which one?)

long tobacco stocks?

long intc? Or ASML?

 

 

 

Interesting question. But why would you want to be long anything at all for hedging such scenario? 

 

Anyway, I would add BRK to your list of longs, probably would be allright, after some sudden rerating:))

[sleepydragon]

8 minutes ago, UK said:

 

Interesting question. But why would you want to be long anything at all for hedging such scenario? 

 

Anyway, I would add BRK to your list of longs, probably would be allright, after some sudden rerating:))

That’s why holding cash is one of the options I listed. But I am thinking maybe gold too.

I am already neck deep in brk

 

[Spekulatius]

I don‘t see why energy stocks benefit from worsening US-China ties.

 

Others will be Solar cell producers (First Solar). Rare earth miners and processors and material co like Umicore should benefit in many ways. LED cos like Osram or Wolfspeed have been pummeled by cheap subsidized Chinese competition and should see a reversal in their fortunes.

 

Take any heavily subsidized Chinese industry and find western competitors and you have potential winners.

Edited September 16 by Spekulatius

[Luke]

"Reversing globalization would involve a massive derating of US asset prices as sales to foreign buyers are artificially restricted. Effects on GDP could theoretically be contained, but the wealthy would have to become poorer in hopes of bringing low-income folks back into the middle class as investment bankers become process engineers and Uber drivers become factory workers. For a political economy that couldn’t figure out a mechanism to pay-them-off as globalization created immense riches, how likely is it that the immensely rich will willingly stomach becoming significantly poorer?"

 

In that case owning local manufacturing companies that take chinas market will be good! 

Edited September 16 by Luke